Exports ― specific transactions

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Exports ― specific transactions
  • Chain supplies
  • Exports of computer software
  • Exports to oil rigs and other continental shelf installations
  • Sales to government departments
  • Sales to overseas authorities
  • Stores on ships and aircraft
  • Postal exports
  • Exports by rail
  • Auctioneers
  • Exports under the 'groupage' arrangements
  • Exports to the Channel Islands
  • Exports via another EU member state

This guidance notes deals with the export issues that relate to specific transactions or industries and should be read in conjunction with the Exporting goods to non-EU countries and Overview of main export procedures guidance notes.

Chain supplies

If a number of businesses are involved in the transaction but only the last transaction actually results in the goods being exported, the sale of the goods will be liable to UK VAT as the supply is between two UK resident companies, eg:

  • US Co orders some goods from a UK based company
  • UK Co orders the goods from another UK based company (UK supplier Co)
  • UK supplier Co delivers the goods directly to US Co and issues its invoice to UK Co

VAT Notice 703 

Therefore the sale of the goods by UK supplier Co to UK Co will be liable to UK VAT. The supply by UK Co to US Co will be zero-rated as an export providing that UK Co obtains satisfactory evidence that the goods have been exported from the UK. Please see the Exporting goods to non-EU countries guidance note for more information on the requirements.

Exports of computer software

The VAT treatment of exports of computer software will depend upon whether it is 'off the shelf' software or 'bespoke' software.

If the software is mass produced or 'off the shelf', such as home computer or gaming software, it will be treated as a supply of goods. Therefore the normal export rules will apply to this transaction, as outlined in the Exporting goods to non-EU countries guidance note.

If the computer software is deemed to be bespoke then this is treated as a supply of services and different VAT

More on Selling goods to overseas countries: